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Funny watching the different spin on this story. Alternative take from the Times (https://www.nytimes.com/live/2022/04/28/business/gdp-inflation-news https://w

Funny watching the different spin on this story. Alternative take from the Times (https://www.nytimes.com/live/2022/04/28/business/gdp-inflation-news https://www.nytimes.com/live/2022/04/28/business/gdp-inflati...): > The U.S. economy contracted in the first three months of the year, but strong consumer spending and continued business investment suggested that the recovery remained resilient. ... > In the first quarter, slower growth in inventories shaved close to a percentage point off G.D.P. growth. Companies raced to build up inventories in late 2021 to make sure supply-chain disruptions didn’t leave them with bare shelves during the holiday season. That meant they didn’t have to do as much restocking as usual in the new year. Similarly, from Bloomberg (https://www.bloomberg.com/news/articles/2022-04-28/u-s-economy-contracted-in-first-quarter-on-surge-in-trade-gap https://www.bloomberg.com/news/articles/2022-04-28/u-s-econo...) > The report is more an illustration of how GDP calculations tend to be volatile from quarter to quarter, not necessarily indicating weakness in the economy or a sign of recession. The contraction was due to a jump in imports and a drop in exports, coupled with a slower buildup of businesses’ stockpiles. On a year-over-year basis, the economy grew 3.6%. ... > Together, trade and inventories subtracted about 4 percentage points from headline growth. Government spending shrank, also weighing on GDP. But real final sales to domestic purchasers, a measure of underlying demand that strips out the trade and inventories components, accelerated to a 2.6% annualized rate. As always: synthesize from multiple news sources.

codefreeordie 4y ago
It's a fascinating economic "recovery" that's actually an economy shrinking. The definition of a recession is two consecutive quarters of negative gdp growth, so it's funny to call the beginning of a recession a strong "recovery"
- BaseballPhysics 4y ago
  The analyses I've seen indicate that a single top-line figure like GDP belies a lot of underlying complexity and fails to tell the whole story. Feel free to provide specific critiques of these analyses. I'm certainly interested to hear your perspective, as the data is complex and COVID has made the world more than a little bit weird. But snark and scare quotes do little to enlighten.
  - codefreeordie 4y ago
    GDP is a single number, and reducing the entire economy to a single number is always going to be inherently reductionist. That said, there are a lot of different signs, indicators, and numbers that suggest that the present economy is not really amazingly wonderful despite how inconvenient that is for the current administration and its boosters like the Times. Obviously, inflation being really quite high (and going only upward) isn't a great sign. Low unemployment is a strong indicator, though the fact that the labor participation rate is still at 1970s levels (when the labor force was still much more significantly gendered) is not. Labor participation is increasing slightly, so it's still not all doom-and-gloom, but it's not great. Low unemployment also means that the US is unlikely to be able to get its economy back to growing simply by hiring more people to be productive -- since everybody willing to work already is. GDP declining is, as discussed, a direct measurement of the decline in the size of the economy. The widespread "everything shortages" that are plaguing basically all corners of the goods economy is another -- and the fact that a year later the situation is even worse is not promising. Overall, it's a bit disingenuous to talk about the amazing and stellar economic recovery that's going on. It's much more of an economic teetering-on-the-edge-but-maybe-it-will-stay-on-the-okay-side.
    - BaseballPhysics 4y ago
      > It's much more of an economic teetering-on-the-edge-but-maybe-it-will-stay-on-the-okay-side. I couldn't agree more! To be clear, I posted those alternative takes not because I buy into them as a complete alternative narrative, but rather to, again, encourage people to synthesize multiple points of view in order to get a more balanced picture. Your comment actually does a very nice job of summarizing those points of view, so thank you!
- baron816 4y ago
  > The definition of a recession is two consecutive quarters of negative gdp growth That’s not the definition of a recession: > the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. https://www.bea.gov/help/glossary/recession https://www.bea.gov/help/glossary/recession

codefreeordie 4y ago

It's a fascinating economic "recovery" that's actually an economy shrinking. The definition of a recession is two consecutive quarters of negative gdp growth, so it's funny to call the beginning of a recession a strong "recovery"

BaseballPhysics 4y ago
The analyses I've seen indicate that a single top-line figure like GDP belies a lot of underlying complexity and fails to tell the whole story. Feel free to provide specific critiques of these analyses. I'm certainly interested to hear your perspective, as the data is complex and COVID has made the world more than a little bit weird. But snark and scare quotes do little to enlighten.
- codefreeordie 4y ago
  GDP is a single number, and reducing the entire economy to a single number is always going to be inherently reductionist. That said, there are a lot of different signs, indicators, and numbers that suggest that the present economy is not really amazingly wonderful despite how inconvenient that is for the current administration and its boosters like the Times. Obviously, inflation being really quite high (and going only upward) isn't a great sign. Low unemployment is a strong indicator, though the fact that the labor participation rate is still at 1970s levels (when the labor force was still much more significantly gendered) is not. Labor participation is increasing slightly, so it's still not all doom-and-gloom, but it's not great. Low unemployment also means that the US is unlikely to be able to get its economy back to growing simply by hiring more people to be productive -- since everybody willing to work already is. GDP declining is, as discussed, a direct measurement of the decline in the size of the economy. The widespread "everything shortages" that are plaguing basically all corners of the goods economy is another -- and the fact that a year later the situation is even worse is not promising. Overall, it's a bit disingenuous to talk about the amazing and stellar economic recovery that's going on. It's much more of an economic teetering-on-the-edge-but-maybe-it-will-stay-on-the-okay-side.
  - BaseballPhysics 4y ago
    > It's much more of an economic teetering-on-the-edge-but-maybe-it-will-stay-on-the-okay-side. I couldn't agree more! To be clear, I posted those alternative takes not because I buy into them as a complete alternative narrative, but rather to, again, encourage people to synthesize multiple points of view in order to get a more balanced picture. Your comment actually does a very nice job of summarizing those points of view, so thank you!
baron816 4y ago
> The definition of a recession is two consecutive quarters of negative gdp growth That’s not the definition of a recession: > the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. https://www.bea.gov/help/glossary/recession https://www.bea.gov/help/glossary/recession